SEC Issues New No-Action Relief for Short-dated Tenders

On January 23, 2015, the SEC staff issued a no-action letter significantly altering its position on debt tenders open for less than the 20 business days specified by Rule 14e-1 (“short-dated tenders”) by, among other things, expanding the use of short-dated tenders to non-investment grade rated debt and providing a limited ability to offer new debt securities as consideration, either in lieu of or in addition to cash, in exchange for existing debt securities. At the same time, the no-action relief imposes new limitations on short-dated tender offers, including a prohibition on financing the tender with the proceeds of certain types of senior indebtedness and on the use of rolling settlement.